Subcontractor or Sole Proprietor? Contractor Insurance Options That Fit Your Business Size

Whether you pick up jobs as a solo tradesperson or manage a crew of subcontractors, your insurance needs differ in ways that matter. A gap in coverage may expose you to out-of-pocket costs that threaten the business you have built. Knowing which policies apply to your situation is a practical first step toward covering your livelihood.

Coverage Basics for Sole Proprietors

As a sole proprietor, you and your business are legally the same entity, which means personal assets can be at risk when a job goes wrong. A general liability policy is typically the starting point, offering coverage for third-party bodily injury and property damage claims. Depending on your trade, you may also need:

• Tools and equipment coverage for gear you own or transport
• A contractors license bond if your state or client contracts require one
• Workers’ compensation if you hire any employees, even part-time

How Subcontractor Status Changes the Picture

If you work as a subcontractor, the general contractor may carry some coverage, but you should not assume their policy extends to your work. Many general contractor policies exclude subcontractors or require proof of your own insurance before you step on site. Carrying your own general liability policy financially protects you from claims arising from your scope of work, regardless of what the general contractor holds.

Scaling Up When Your Business Grows

When you add employees or take on larger projects, a business owners policy (BOP) can bundle general liability and commercial property coverage under one policy. Builders risk insurance covers structures under construction.

How HBI Insurance Can Help

Our team can help you compare options to find coverage that fits your work type and volume. Contact HBI Insurance to review your contractor insurance and make sure your policy matches the work you do.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.